Tech-enabled services
Unlocking Growth Opportunities
Exploring the Transformative Landscape of Tech-Enabled Services
In the fast-paced digital age, the convergence of technology and services has given rise to a dynamic sector known as “tech-enabled services.” This sector represents a fusion of innovative technologies with traditional service industries, leading to groundbreaking solutions that are shaping the way we live, work, and interact. Let’s delve into the diverse realms encompassed by tech enabled services and explore the array of benefits they bring to the table.
TRENDS & DRIVERS SHAPING THE TECH-ENABLED SERVICES SECTOR
Digital Transformation
Streamlining business processes, products, and services through modernization and automation enhances efficiency, boosts the employee and customer experience. This drives demand for consulting, engineering, and implementation services, especially due to labor shortages, prompting outsourcing for cost-effective IT expertise.
Data Analytics and AI
The explosive data growth fuels the need for data analytics and AI solutions. Service providers offer expertise in these areas to extract insights, automate processes, and enhance decision-making. Businesses aiming to gain a competitive edge through data are driving growth in this sector.
Remote Connectivity
Increasing remote connectivity expands service accessibility, with examples like telehealth, remote work solutions, and IoT-enabled devices bridging geographical gaps.
Customer-Centric Approach
Tech-enabled services prioritize customer experiences with personalized recommendations, proactive issue resolution, and interactive interfaces becoming standard.
Automation and Robotics
AI and machine learning-powered automation transform service delivery by streamlining repetitive tasks, boosting efficiency, reducing errors, and altering operational dynamics through RPA.
Cybersecurity and Privacy
In response to rising cyber threats, organizations prioritize cybersecurity. IT-service providers offer security solutions, including threat detection, incident response, data protection, and compliance services, with growing demand to safeguard digital assets and maintain compliance.
Regulatory Compliance
Tech solutions assist organizations in real-time monitoring and ensuring compliance with regulations and standards like ’tisax’ as services become increasingly digital
Cloud Computing
Cloud technology enables scalable, flexible service models, supporting remote access, collaboration, and data storage, transforming service delivery.
E-Commerce Evolution
E-commerce evolves with augmented reality, virtual try-ons, and seamless payment systems, reshaping online shopping. Subscription-based models gain popularity across sectors, providing services without ownership burdens.
These trends and drivers collectively shape the tech-enabled services sector,
driving innovation, efficiency, and improved experiences across industries.
CORE QUESTIONS FOR DUE DILIGENCE IN THE TECH-ENABLED SERVICES SECTOR
Human Resources
- What is the expertise and experience of the management team in both technology and the sector the company operates in?
- How does the company attract, retain, and develop talent, particularly in technology roles?
- What is the significance of conducting a review of the organizational structure and organigram with a detailed assessment of potentials and risks, and how does it relate to the review of the distinction between ‘business critical’ and discretionary project offerings, considering factors such as typical project lengths and implied implications?
Business Model and Value Proposition
- What is the company’s core tech-enabled service and how does it differentiate itself in the market? What’s your USP?
- What it the company’s value proposition? What value does the service bring to customers, and how is it aligned with current market trends and needs?
- How does the company monetize its tech-enabled services? Is it subscription-based, transaction-based, or another model?
Market Opportunity and Competition
- What is the addressable market for the tech-enabled service, and what is the company’s current market share?
- Who are the main competitors in the sector, and what are their strengths and weaknesses?
Financial Performance
- What are the company’s revenue and profit trends over the past few years?
- What is the cost structure of providing the tech-enabled service, including technology development, maintenance, and operational expenses?
- How does the brand perform against competitor, what’s the margin level per service?
Customer Base and Satisfaction
- Who are the company’s key customers, and what industries or sectors do they belong to?
- How can you review the customer concentration risks and stickiness (churn rates)?
- What future demands of (existing and potential) customers do you have – also in different industries and countries?
- What is the customer retention rate, and are there any notable customer success stories or testimonials?
Regulatory and Compliance
- What regulatory requirements or industry standards apply to the tech-enabled services sector, and how does the company ensure compliance?
- Are there any legal or regulatory challenges that the company has faced or is currently addressing?
Growth Strategy
- What are the company’s short-term and long-term growth plans for expanding its tech-enabled services, e.g.
- assessment of growth potential in existing customers vs new customer acquisition
- assessment of overall growth plan and growth options beyond the business plan
- assessment of internationalization potential and other avenues of growth?
- Are there plans to enter new markets, introduce new features, or diversify the service offerings?
In conclusion, the tech-enabled services sector showcases the harmonious blend of technology and traditional services, creating a landscape of endless possibilities. From revolutionizing healthcare to reimagining transportation, the convergence of technology and services is poised to shape a more connected and efficient future for us all.
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Lutz Müller
Subject matter expert tech-enabled services
Phone: +49 151 262 633 43
E-mail: lutz.mueller@telescope-advisory.com
